CAPITAL ONE SECURED CREDIT CARD REVIEW [UPDATED 2019]
With low fees and a smooth application process, the Capital One Secured credit card is ideal for people who are looking to build or repair their credit.
The Capital One Secured credit card is fairly basic in that it does not provide cardholders with rewards. You won’t earn travel reward miles or cash back earnings with this particular credit card.
The advantage of the card is that it enables people who have no credit history or people with bad credit scores to build up a positive credit report.
As with all secured credit cards, this one does require you to put down a refundable security deposit. A security deposit of $49, $99 or $200, based on creditworthiness, is required before the card can be activated.
- No annual fee – ever
- Helps you build good credit with Equifax, Experian and TransUnion
- No transaction fees
- No rewards program
- Requires a security deposit of $49, $99, or $200 based on creditworthiness
- Set APR of 26.99%
As indicated, there are no rewards offered with the Capital One Secured credit card. You won’t be earning cash back or miles that can be redeemed for airline travel with this card.
Its only advantage is to help you develop a beneficial credit report with the three main credit bureaus in the U.S. – Equifax, Experian and TransUnion. Beyond that, there are no perks associated with this credit card. It’s just a basic or entry level card for people who have difficulty getting a higher end credit card.
ANNUAL AND TRANSACTION FEES
The highlight of the Capital One Secured credit card is the annual fee. There is none. And no annual fee means money left in your pocket. While other secured credit cards charge some type of annual fee – even a small one – the Capital One Secured card offers a $0 annual fee for as long as the credit card is in your wallet or purse. Not having to pay just to own and use a credit card is a nice feature and one that can help you in your quest for financial control.
Equally impressive is the fact that there also are no transaction fees associated with the Capital One Secured credit card. You won’t pay any fees on foreign transactions, and you also won’t be subjected to any fees on balance transfers, which means that you may want to consider using this credit card to consolidate debt from other cards and loans.
Do take note that there’s a charge for cash advances of $10 or 3% of the amount of each cash advance, whichever is greater. So, as with most credit cards, you’ll want to be careful about taking cash advances off this particular card. It can be expensive to do so. Lastly, there are penalty fees of $38 for every late payment made – so be careful to pay the minimum owing on the credit card each month.
In terms of interest rates, the Capital One Secured credit card has a set annual percentage rate (APR) of 26.99%, which is just about as high as you can go. Other comparable secured credit cards have APRs of between 18.64% and 24.74%. So the Capital One Secured card is definitely on the high end of the APR spectrum. As with all secured credit cards, there’s no APR range based on your credit score or history.
Everyone who owns this card will be subjected to an interest rate of 26.99% on purchases made. While you may save some money with the $0 annual fee you could lose those savings in high interest accumulation. The APR on cash advances is also 26.99%.
There really are no features to speak of with the Capital One Secured credit card. A $0 annual fee is the highlight.
The only other things worth noting are that you can get access to a higher credit line after making your first five monthly payments on time with no additional deposit required; you can easily manage your account 24 hours a day, seven days a week with online access, by phone or using a mobile app; and this credit card is accepted by merchants and retailers far and wide.
WHO SHOULD NOT GET THIS CARD
The Capital One Secured credit card is not for people who have a positive credit history, desire reward benefits, or want a low interest rate. If you fall into one or all of those categories than you should steer clear of the Capital One Secured card.
It really is for people who have no credit or bad credit and, as a result, have limited options when it comes to getting a credit card. People who can get an unsecured credit card that does not require a security deposit, has a low interest rate, and offers travel rewards or cash back earnings should do so.
ALTERNATIVE CARD: DISCOVER IT SECURED CREDIT CARD
A secured credit card that’s superior to the Capital One card in many respects is the Discover It Secured. While it also helps people with no credit or bad credit build positive credit, the Discover It Secured credit card has no annual fee and provides rewards to cardholders in the form of cash back earnings.
Plus, there are no transaction fees with the Discover It Secured card. The set APR on the Discover It credit card is also lower than the Capital One Secured credit card at 25.24%. If you’re interested in credit card rewards and want a $0 annual fee, then consider getting the Discover It Secured credit card.
The Capital One Secured credit card should be treated for what it is – a card that, when used responsibly, can help people build and improve their credit report. Having no annual or transaction fees is nice, but a high interest rate and lack of rewards make the Capital One Secured credit card a fit for certain people only, i.e. those who need a credit makeover.